Deutsche Post to get over bn euro cashback from EU ruling

BELGIUM: Deutsche Post AG will get more than euro1 bn (US$1.57 bn) back, the company said Tuesday, after an EU court ruled that regulators were wrong to make it return a German government subsidy. The European Court of First Instance, the EU's second-highest legal authority, backed the German delivery business' challenge to a European Commission decision that fined Deutsche Post euro572 mn in 2002. The court said the EU's antitrust authority had not proved its case that Deutsche Post misused public funds _ intended to pay for the country's postal service _ to unfairly undercut private sector rivals on door-to-door parcel delivery services from 1994 to 1998. The German federal government should now return that money to the company with interest _ which should total more than euro1 bn, the Bonn-based company said in a statement. But Deutsche Post is not out of the woods yet. EU regulators opened a new state aid probe last September to check if the company bolstered its commercial operations with any of the German state subsidies it received as far back as 1989. The EU said rivals had complained that Deutsche Post used government money to muscle into the private sector and sell services ``too cheaply'' to banking arm Postbank and parcel service DHL _ one of the world's three biggest delivery companies. It did not say how much money might be at stake, and stressed that its investigation may well clear Deutsche Post. Deutsche Post denies receiving any illegal subsidies. Governments usually pay postal operators to run the costly mail delivery service for the country, but EU rules forbid them giving more than is needed or allowing money be used for other services.